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What brands need to know about social commerce vs. e-commerce

What is social commerce?

As social media platforms jockey for consumers’ attention, the lines between true social commerce and e-commerce can be blurry. For some, social commerce is not separate from e-commerce, especially as platforms stretch to be more than just photo-sharing or Tweets.

“Social commerce is simply e-commerce driven by social media interaction and engagement,” Jessica Phillips, founder of The Social Standard, an influencer marketing agency, said via email. “Those lines are getting more and more blurred. Social media isn’t even really social media anymore. Instead it’s e-commerce, discovery, social, photo, video and entertainment. All of those verticals used to be separate marketing categories, but they are quickly merging into one. While this Shopify partnership is simply setting up a storefront on TikTok for the brand or creator, it is leveraging social engagement on the platform to drive purchase.”

It doesn’t appear like that engagement will wane. Retail social commerce is already a multibillion dollar industry in the U.S., generating $26.97 billion in sales in 2020, according to a report by eMarketer. It’s estimated that U.S. retail social commerce will more than double by 2023, soaring to $56.17 billion.

For others, like Alessandro Bogliari, co-founder and CEO of The Influencer Marketing Factory, social commerce means that customers can discover, shop, and purchase products without leaving the app or being redirected to a retailer website. He points to Instagram Checkout as an example.

“Even with the shopping tabs, customers have to complete the purchase in an embedded browser,” Bolgiari says of the latest Shopify integration with TikTok. “It’s a good starting point, but it’s still e-commerce, not solid social commerce.”

For its part, Instagram checkout hasn’t gained much traction. 

“Instagram Checkout is flawed because there has been a disconnect between Instagram’s customer support and the brands who end up selling and fulfilling the orders,” says Dan Brewster, senior VP of marketing at Scalefast, an e-commerce platform. “A return on an order through Instagram Checkout is usually a bumpy process for both the customer and the merchant.”

Work for it

One of the most important metrics brands want to see on TikTok before investing more resources is user adoption of the new feature, according to Jones. TikTok’s platform voice is very specific, and authentic content often performs the best.

“One of our best TikToks was one I posted on a Friday night,” recalls Poppi’s Ellsworth. “I was very casual, you know in that TikTok style, and just filmed a bit about how the brand got started, and our Shark Tank deal.” 

The post got 14 million views, and Ellsworth said Poppi did $100,000 in Amazon sales over that weekend.

There’s also the risk that pushing product can turn off potential customers. “It really comes down to user intent,” says Brewster. “The challenge with social commerce was always that users are in ‘social mode,’ so they don’t want to shop. Through seemingly brute force, users are more accepting of being pitched while on social channels.”

For now, many marketing experts believe more brands are about to start experimenting and increase budgets around TikTok. Some also predict that for creators, these types of partnership will help them promote their own merchandise on TikTok. 

“It’s a smart integration and shows that they want to push in that direction,” says Mae Karwowski, founder and CEO of Obviously, an influencer marketing agency. “It’s a big first step toward true social commerce.”